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Us 41, Washington 23, United States 12, China 12, U.s. 11, America 9, Howard Rosen 8, Peterson 7, Mississippi 7, Boehner 6, John 5, John Boehner 5, Pentagon 5, Colombia 5, Florida 5, Afghanistan 5, Xavier Bacerra 4, Roger Wicker 4, Iraq 4, New Jersey 4,
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  CSPAN    Washington Journal    News/Business. Journalists and  
   policy-makers take viewer questions; newspaper articles.  

    July 7, 2011
    7:00 - 10:00am EDT  

the house meets next to continue its work on the in about 45 minutes we will look at the ongoing negotiations over raising the federal debt ceiling with democratic congressman xavier bacerra and republican senator roger wicker, and also howard rosen at the peterson institute for international economics with a look at the pending free-trade agreements with colombia, south korea, and panama. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] host: both "the washington post" and "the new york times" are reporting president obama would consider social security changes or cuts to achieve a budget deal with congress. that is what we want to discuss with you this morning on "washington journal." what kind of changes to social security would you consider, if
any, to help achieve a more balanced budget. now, we divided the lines by age for this first 45 minutes. a reminder, allow 30 days between your calls. but, if you are 65 and over and went to talk about potential social security changes that are being considered -- tell us what kind of changes you consider to social security, if any. would you consider a benefit cut, income cap increase or potentially raising the retirement age? here is the lead story this morning in "the washington post ." obama -- social security on
that would represent a major legislative achievements but also put obama and gop leaders at odds with major factions of their own party.
that's from "the washington post" this morning. again, present obama, according to "the new york times," "the washington post," and "national journal," considering changes to social security. the numbers for you to dial -- and we are going to begin with bud in trenton, new jersey. 69 years old. what do you think? caller: i believe 65 and older, the benefits should stable because there has not been a raise in the last two years.
and we worked for it. if they are going to do anything, they should get the next generation coming in behind us. that is my thought from that. i know they have to do everything to get a balanced budget, and that is on the table. but if they would stop some of bickering and go ahead and get this done -- but do it in a way where people like myself don't get hurt as bad. because as it is now, you have to pay out of pocket for subsidized insurance. and then part d, prescription drugs. that does not count, paying for the medication itself. i really do believe that if they would just get it done and do it
in a way that people like myself don't get burned too bad, things would be ok. host: do you rely completely on your social security benefits for your retirement? caller: yes. host: all right. lois is 65 years old from johnstown, pennsylvania. caller: i am tired of obama always bargaining with the republicans. they gave the gas companies more money again, where they shouldn't have. and the rich get away without paying anything and the day gets -- their trips, they can take it off of their taxes. it is always the middle class, which there is no more. senior citizens, we gave up two years of an increase, which is only 2% to 3% -- and an increase in medicare takes it away
anyhow. i have an income of $816 of social security. like the man before said about paying out for medication, and like -- might go for needed a shot in her knees for arthritis and the cost of the shop for her was $134. she could not afford that. i would like to see something done that there is no bargaining with the republicans. and not only that, i am tired of having to scrape and scrounge. i worked all love my life. they took the social security money out of my check every two weeks telling me this would pay for my retirement when i hit the golden years. the golden years suck. and not only that, you people, if you take that money from us working class people, you are stealing money. you have no right to do. host: that was lois from
johnstown, pennsylvania. kathy is in dallas, 69. what do you think about changes? caller: i don't think there need to be changes. just like the lady just said, they took money out of my mom -- she only gets $896. medicare doesn't pay for glasses or anything. and now you have doctors who don't take medicare. there needs to be increasedment. how do seniors live when they don't even get a cost of living? my retirement age is 66. i retired from the dod what everybody thinks he makes a much money. when i get 62 dod will take half of my retirement back and i will be living on zero because they will force me to take the social security early but if i take it early i take a penalty. i still have to pay medicare,
which to wait until 65 or 66. i have to come out of money. i am sick of obama. i have voted for him and stood by him and he always compromises. we don't need any compromise on social security. if anything, give the people a 10% raise. i am just really upset. host: what about on the flip side -- do you think it is important that these debt talks continue, that the budget gets more in balance? caller: we can pay some of our debt but why would you take it off the bag on poor -- i can hear you. host: we are listening. caller: why would you take it out on poor people? it may be some people with good jobs making 60,000, $80,000, maybe they get 6000 but the average person gets 816 and that
is not enough money for the people to live on. host: thank you for calling in. if you don't get through on your phone lines and you want to send us a tweet, you can send it to a little bit more from "the washington post" article.
a viewer tweets in -- gland, 35 years old from connecticut. good morning to you -- glen. caller: i think a lot of people are angry -- angry and rightfully so. we shouldn't cut social security. the message they are sending is we have to pay our dues on the treasury so we have to raise the debt ceiling. but the message they are sending is that we are the ones who need to pay for it. i think they need to up regulations, they need to get more middle-class jobs by hiring
regulators and training people to regulate companies that are stealing from them. maybe that would trickle upward instead of trickle-down. host: mary, 67. illinois. caller: good morning. first-time caller. i just want to say that i support president obama's balanced approach to debt reduction. social security and medicare -- i support raising the early retirement from 62 to the 65, and full retirement benefits to be paid at age 70. people are healthier and living longer than they used to be one social security was born. for medicare, i support not ending the medicare benefit. i support, like social security, lifting the income limits -- my
entire income was taxed for social security and medicare during the time i worked, and for the wealthiest americans only the smaller percentage of their income and that is simply not fair. host: are you retired? caller: i am retired but in order to basically pay my medicare supplement insurance because medicare is not quite enough to cover everything, and to pay my bills, i still have to work part time. host: what kind of work? caller: office worker, secretary type. when i lived in florida i ran offices for the financial industry. and i was grateful to get out of the business. host: do you rely completely on your social security or do you have separate savings? caller: i have a little savings but i can't rely completely on
either my small savings or social security. i continue to work part time in order to supplement because what i received in retirement benefits isn't enough to pay my rent and my bills and the supplemental insurance i need to pay to supplement medicare. as long as i remain healthy i am able to do that but if my health takes a turn for the worse and i can't work anymore, and that means i become homeless. host: 38 years old, maryland. angela, you are on c-span. caller: i am 38 and currently on the last social security statement the early retirement age is 67 and a full retirement is not until 70. host: because of your aid your early retirement is 67? caller: it is directly on my social security statement -- i started working in 1988 when i was 15, so i have been working for almost a quarter of a
century and my early retirement this 67 -- and broke -- full retirement is 70. i will be working into my 70's if they raise this age and working 60 years until i am able to retire. the reason they are doing this is they want the wealthy to pay more taxes. well, we know the tax rates go up and down. they could raise taxes now and five years from now and go back down but they are never going to lower the social security age. it will keep going up and i feel it is unfair that what the tax rates go up and down, the age for retirement is digging pushed and pushed. i want to stop and smell the daisies' before i am pushing them up some day. i don't wanna be an old lady up and down the highway shlep it in traffic. host: idaho, richard at 43. what are your thoughts on the potential social security
changes to help get rid of some of the debt? caller: first, i wanted to say that the presidential tweet on the budget was very interesting to watch right before hand because he sounds like he has a decent approach to fixing things that makes sense to me. but as everyone else was saying, i support keeping social security and increasing social security benefits for people who are age 65 and older. my dad, he raised us. he worked all of his life. my mom was a stay at home mom and she raised us well. they are surviving on my dad's social security. and it is just tough for them. and he has invested all of his
life, saving for his retirement. but a sense of the stock market went down on the -- since the stock market went down, the value of his investments went away. but he also invests in bonds but since the interest rates are so poor, that is not doing very well. we can't punish these people who have worked all of their lives and are struggling to get by. host: maplewood, new jersey. william, 91. caller: first of all, the money that i am getting is from the earnings of money that has been collected in my name and all of
it has been my salary. host: will you turn down the volume on your television, please? yes, turn that it down and just listened through the phone and go ahead and make your statement. please, go ahead. we are listening. william? you are on the air. we are listening to you. don't listen to the tv. caller: the thing about this is the money that is in the social security fund is my money, money and that i gave, taxed every month. excuse me -- i am 91.
i got an excuse. but also there is money given as part of my salary or income, board of education, or the state, added to my total. so, if you take that money, you are taking my money. host: how many years have you been receiving -- how many years have you been receiving social security? caller: since i was 83 -- 83 cents. host: 1983? the you think you received more in benefits than you paid in? caller: it doesn't matter. my payments are based on actuarial figures, not on how
much is being put in. some people die before they get my age. it is actuarial figures. that is what it is set up to do. host: would you consider any changes to the social security? how would you get rid of the debt then? caller: i would pay in tax. as a matter of fact, i could pay my full cost, paying for the wars and all of the other stuff, in one sum, and i could still live good because i was a saver, and so on and so forth. host: means testing for social security is a proper way to go?
caller: yes. host: thank you for calling in this morning and thank you for watching c-span. john, 63 years old in new jersey. the caller: just a general question. back in the 1960's, social security was placed in general funds and sense than they have been taking from it. how come they never repaid it? if that money was still there drawing interest, i think social security would be standing where it should be. host: kay tweets in -- a little bit more from "the washington post." we want to look at some other articles this morning as well as we take calls on this topic. we divided by age of this morning. obama has already spoken to house speaker john boehner --
the next call comes from james from texas. good morning to you, sir. what changes would you consider for social security, if any? caller: i think we need to go into social security. i am on social security. i don't get much. i am no rich american. but i think, they need to it -- need to go into social security.
cutting out the dead wood. because there are a lot of people on social security, and that the social security disability and that ssi stuff that don't belong on there. they've got kids on their eight or nine years old getting social security disability checks because they've got attention deficit disorder. eight-year-old kid does not need a social security check for that. host: mr. happy tweets in -- here is the front page, lead story in "the new york times." this is how they play it. over church by boehner, is the subheading -- overture by boehner. peter.
caller: i am medically retired. i had a liver transplant in 2005 so i am in social security and disability benefits. it has been a lively conversation. there have been some awful good calls coming in. but i would suggest to america that the real problem with our finances is the two-party system. we need to establish term limits and the break up the monopoly of the two-party system. you guys are complaining about how all of this is being spread around and dold out. go back to the 1960's, like the previous caller mentioned, when they changed the social security funds and held none of the money has ever been paid back. the blame lies with the two parties -- the republicans and democrats. term limits is the first start
and then we can proceed from there. please, america. wake up. host: a viewer tweets in -- los angeles -- "los angeles times" this morning, obama and boehner meet in secret to discuss deficit.
raleigh, north carolina. sharon, 30 years old. what do you think about the social security situate region? caller: i and so baffled about listening to the conversations of people -- i'm so baffled. with all due respect to the older people entering and into social security -- i understand that your money was taken by congressmen, i understand. i also understand that you guys voted for these people over the decades, and they stood up and they told you -- they lie to you. they tell you the money was there and they'd like. i personally think those people need to be charged in some kind of way because you should and to be able to do that under the
eyes of government. all people have to do is look at greece and see what happens to a country that is tied up in entitlement society. i don't want to be like that. i know in my age, i won't even have social security. i have been told that when i was in college -- i better save up. people don't want to do that. people have to get ready, because there is about $3 trillion that the democrats want to get their hands on to fill that gap in social security. something's going to happen if we don't do something now. and i think there are a lot of sacrifices that have to be made on my end and everyone else's end, but there also has to be spending, spending has to be stopped. host: sharon, 30 years old from raleigh, north carolina. debating the economy in 140
characters or less. this is from the twitter town hall meeting held yesterday at the white house. john boehner sent in a tweed suit president obama -- here is president obama. >> the next question comes from someone you may know -- speaker boehner bay. >> there you go. [laughter] >> after embarking on a record spending binge that left us a deeper in debt -- where the jobs? i will note, these characters are not his fault -- his fault. >> john needs to work on his typing skills. [laughter] look, obviously john is the speaker of the house, he is a republican, so this is a slightly skewed question.
but what he is right about is that we have not seen fast enough job growth relative to the need. we lost, as i said, 4 million jobs before i was sworn in. about 4 million jobs were lost in the few months right after i took office before our economic policies had a chance to take any effect. and over the last 15 months we have actually seen two million -- 2 million jobs created in the private sector and each month seeing growth in jobs. but, when you've got and 8 million jobs hole and you are only filling it 100,000, 200,000 at a time each month, obviously it is way too long for a lot of folks still out of work.
host: according to "politico," boehner once a better answer. not satisfied with the answer -- boehner wants a better answer. that was an e-mail sent to politico from john boehner bossy -- john boehner's office. what are your thoughts about potential changes to social security? caller: breitbart -- thoughts are it will have to happen sooner or later. we have two daughters and the 40's and neither one are saving money right now because one of them doesn't even have a job. but they are not going to be able to depend on social security because there are two things everybody has to know. if you die before you start
receiving social security, you don't get a penny of it. every penny of that goes into the big pot and it's distributed to everyone else. anybody who dies to young, all of their money has been wasted. it is just going into the government pot. the second thing you have to know, is if you save up to much, when you start receiving it, you get taxed on it again. if you get taxed on social security when you are your money what you are working and then after you start receiving it, if you save up to much because you were worried about it, you get taxed on it again. it gets added to whatever income you have from your savings. host: do you think private savings accounts, that your social security should be yours when you pay in, you should be booked to get or keep or transfer? caller: i certainly do. that is why i voted for president bush to the second
time around. i did not agree with him for very much but i agree with him on that point. people should have their names on their accounts and what ever they put into it should belong to them. so even if they die when their 50, that money goes to their family and not into the great into thepot. host: are you fully retired? the you rely completely on your social security? caller: no, i don't. i rely on my savings as well. that is why 85% of my social security falls under the tax, being taxed a second time. host: really? that is 74 in ohio. jonathan johnson tweets in -- a viewer e-mails in --
the next call comes from a 30- year-old from detroit. the donald, you are on c-span. caller: you know what the problem with social security is? p pam, the late -- people like the lady who just called in. i don't want cuts to social security. i am happy to support you and yours forever. but like that lady sharon who called earlier, i started paying social security in 1994. in 1997 before i was even old enough to vote you guys change the rules on me. you made a deal with me when i started paying when i was 14 that i could retire at -- retire at 65 and you change the deal without my ability to vote when i was 17. you didn't even know i can't retire until items 70 and you have been voting for this your entire life and now you want me
to support you? that is not fair. i am not going to do that. you are just greedy, right? you when a fix it? get rid of the regressive tax on payments -- my dad at the end of the year stopped paying social security taxes in july and august. i pay it all year but he was paid out halfway through the year. if you want to do that, do that. but don't look at me because, you know, me and my co-workers got together and we formed a union and now we've got a pension. we put aside money for that. i got mine. i don't care about you. sorry. host: vancouver, washington. jim, 35 years old. guest: thanks for seized -- caller: thanks for c-span. host: any changes to a social security would probably affect you. caller: i am a combat veteran from iraq, i have tbi, so they
forced me to go ahead and retire early. i have not even tried to apply for social security yet. but it just seems to me that all of these politicians -- they've got the best health care in the world and what they need to do is, they need to be required and their families to go get all of their health care through the va, just like i have to go so they can see what it is like for us troops. one thing the one lady did say before that i wanted to cap on, is we pay taxes for social security and we are not about to drop interest on that money while it is in savings. my mother, she is in her mid-60s and she is in really poor health so i sent her about $3,000 a year to help her get along. so, i have been disabled and i am sending my mother money and she still can't afford to get her medications. this is just a huge ponzi scheme did what we need to do is vote every single one of the people
in d.c. out of office. and they keep on getting richer and richer and the rest of us basically are getting hammered and hammered. host: a viewer tweets in -- from "the hill"this morning. senate dems rally around comrade -- conrad's left-leaning budget proposal, tax raises.
ron is 65 years old in spokane, washington. caller: good morning. i have been paying -- excuse me, i have been paying into the social security since i was 12 years old. i am 65 now. i've gotten copd, bad heart, blood clots. pretty much all the bones of my body had been broken once or twice. host: what have you been doing? caller: i have been truck driving. i did up until 1988 when david
said if i drove another two weeks of would be dead. i paid all of my life into social security. i realize that the social security i earned paid someone else and when i turned 65 somebody else paid -- excuse me, their social security, and it took care of me. but we are getting screwed already. we are barely making ends meet with what we have and you are trying to take that away from us, too? the deficit -- if the government would quit loading all this money to different countries to get them set up, and if they would pay us back we would not be in a deficit right now. all i am saying is, we've got to keep this social security going. we've got a lot of people showing up after i am dead and gone. i am one of the baby boomers. host: robert is 23 in trenton, new jersey. caller: how are you doing? calling about that social security thing.
host: what are your thoughts? caller: my thoughts about the social security thing is basically right now -- i have a job. they make you pay $17 to $20 for this social security, knowing that i have to wait another 50 years until i retire. most likely is not going to be social security when i retire. it bothers me -- i do not know what that is for me to fall back on. there has to be something for people now that are paying, in 20 years what will they fall back on? if this system is doomed to fail, then we are doomed to just be like in poverty the rest of our lives? host: wauconda work you do? caller: you know, i mean, i work in a convenience store. i did not have one of high- paying jobs. i am broke all the time. host: are you in school or planning on going to school? caller: i was thinking about going to school. i was thinking about going to
some colleges, financial aid and stuff. host: your parents are grandparents, did they get social security? retiredmy parents ain't yet, they are not retarded. my grandparents probably do. i don't know too much about their business. host: hi, august. caller: a lot of people with the social security cannot is social security. a girl i know who was also security, and i asked why and she said anxiety attacks. i had anxiety listening to her. a maintenance man -- peeping at girls, they got him out on bipolar and he is collecting more money than me. kenny took out of -- kennedy
took money out of that for vietnam, clinton did it to knock down the welfare, and a lot of people you talk to, they should not be collecting nothing. and they should do more examination of these people. i don't collect social security disability. i got hurt in work and i missed my back up. they told me i am not eligible because i can lift 10 pounds. right, and i am still heard today. i had to wait until i was 62 to take an early pension. item 74. 74 nowould quit -- i'm but they should quit giving countries money and cut the budget that way instead of taking money from social the jury that i paid in since i was 13 years old. caller: ellen, you are kind of in that golden age before potential retirement. what do you think about changes
to social security to help bring down the deficit and debt? caller: i believe that the social security is supposed to be solved. i worked a great part of my life, since i was about 15 years old, and i paid into social security. i had accepted a commitment from this government that they were going to pay and make me at least reasonably comfortable on in my retirement age. instead, they are talking about putting us deeper into the poverty that we are already in. i am frankly upset. those things that call themselves our representatives are masquerading as human beings and they are thinking of the prescribing of poverty for all of us. we paid into that system. that money belongs to us.
this is our tax money. and then they are going to treat us like this. host: that was -- caller: i cannot believe that they would actually think of taking people's money away from them and reneging on their commitments. the caller: -- host: are you still working today? caller: i am trying to. my husband is a disabled. and it was a catastrophic accident that put us into this situation where we have to have our disability. and i am looking for us to be able to collect our social security. host: all right. thank you for calling in. logan, 20 years old in boynton beach, florida. are you even thinking about social security at your age? caller: yes, sir. i am a student in sarasota, florida.
for your public policy student. we think about this a lot. -- fourth year of public policy student. the original fdr social security program, the figures have not changed that much -- the formula needs to be adjusted because people keep living longer. the gentleman who called earlier was 91 years old. social security is not built a fort that many 91-year olds to be on it. people are also entering the workforce a lot later, or so the statistics say. so the issue is mainly that people need to pay more into it -- probably need to jack up the rate a little bit. the income cap is unfair to everybody. we need to increase the revenues while maintaining the baby boomer generation.
host: do you think you will have a social security check when you retire? caller: i would certainly hope so. i would hope somebody would make a pragmatic decisions, make the compromises and hopefully somebody up and washington will find some common solution that works for everybody. we need a better public policy in this country and less politics. host: logan, 20 years old and boynton beach, florida. joanna tweets in -- in at "the washington post," in other news --
shannondale, pennsylvania. christina, 54 years old. what do you think about what we are talking about? caller: i think we need to eliminate the cap. have bill gates pay the same amount as the rest of the country instead of paying for a week, a day, he pays for social security, and he is done? take the cap off. more people could retire at the age of 55 if they were assured they could have social security and be safe. and eliminate the unemployment problems. this could be the key to helping people with its unemployment
problems and making it much fairer. the sad fact of the matter is mean smaller government means unelected corporate control. the wealthy are quite happy not to pay their fair share. host: quickly, political news. i apologize, we did not get to all of the articles. i really appreciate the dialogue we have been having this morning. did not get to all of the articles. i just wanted to show you a couple in case you wanted to access them yourself. from politico -- because of the amount he raised, $80 million in the last quarter. -- $18 million last what.
in politico -- indiana, open season for dan burton. indianapolis -- indianapolis. republicans are gearing up to defeat dan burton. david mcintosh, former representative who ran for governor of indiana is looking at jumping in the race against dan burton. the last call on this topic of social security changes that are being considered and the debt talks comes from massachusetts. albert, 76. caller: when i was working, i bought the the concept that was sold to me that the social security is one leg of a three legged stool -- and the other two legs are your company's pension -- my company's pension, who i work for at the time, and the third leg is your savings. somehow or other i managed to
maintain that balance. i paid a maximum social security every year, it amounted to about 7% of my income, and my company put in another 7%, and that was 14%. and then i paid about 8% of my income into my ira. that was the maximum you could put in. i could not save any more than that. i couldn't possibly live on just social security. i don't know how you could do it. a person who only has that one leg of that school will really -- stool will really have to give up a lot of their lifestyle. you could not survive with the inflation that has occurred since i retired in 1994. social security -- so all of --
host: all of that said, would you consider changes on how social security -- income cap increases, cut benefits, raise the retirement age? would you consider any of those changes? caller: the actuarial tables, as a gentleman said earlier. my contribution of 7% -- it might have to go higher. there will have to be some adjustments made. a co-worker of mine died about two weeks before he was supposed to retire. here i am 76. i don't know how long i am going to live. they already know how many workers are going to retire in 2025, 2035, and they know what their ages are going to be. they will just have to fit the social security taxes to fit the
reality. they already know what the expenses are going to be. host: thanks for calling in and thanks to everybody for calling in. we are unfortunately out of time. quickly from "usa today," -- elliott's big sur, his show at cnn has been cancelled -- eliot spitzer's show has been cancelled. an wikileaks book deal falls through. but a publisher in britain says it was still expected to publish the book. coming up, we continue our discussion about the debt talks. president obama is meeting with congressional leadership today at the white house. we have a senator coming up, a republican from mississippi, senator roger wicker, but up next, one of the leaders in the house on the democratic side, xavier bacerra. [captioning performed by national captioning institute]
[captions copyright national cable satellite corp. 2011] >> who is really going to be going to get fired up over nancy pelosi or john boehner? they are proxies' or shorthands for the incredibly narrow range of choice that we have in an elected officials. >> in "the declaration of independents." reason deede's nick gillespie takes on the two-party system and possible libertarian solutions. sunday night on "q&a." >> this weekend on book tv on c- span2, is everything you know about the ok corral wrong? jeff guinn tells a different story. on "after words," charles hill
looks at the long war of islamism against the state system. and foreign minister casteneda looks at the challenges to our neighbor. >> every saturday this month, hear historic supreme court oral arguments on c-span radio about 14th amendment cases on equal protection. this weekend, here the 1996 case, united states versus virginia and the virginia military institute on single-sex admission policy. >> this involves the inescapable central question about whether the states can support single- sex education. >> to in this saturday 6:00 p.m. eastern. -- tune in on this saturday at 6:00 p.m. eastern.
>> mission control houston. >> roger, discovery. >> nasa is on schedule for the final mission of the space shuttle program is friday with the launch of 135 atlantis. look back of the shuttle program starting with columbia 30 years ago and explore what is ahead for nasa. online at the c-span video library. search, watch, clip, and share any time. >> "washington journal" continues. host: on your screen is representative xavier bacerra. he is vice chair of the house democratic caucus and he is on the ways and means committee. in fact, he is the ranking member of the ways and means subcommittee on social security. welcome back to the "washington journal." we appreciate you being here. i want to start with an article on yesterday's "hill" newspaper. leading house democrats say
social security cuts are a nonstarter. that was in yesterday's paper. this morning's paper, a lead story and "the washington post." obama -- social security on the table. did this take you by surprise? guest: in this sense that the president saying that -- a program that has not contributed one sense of the deficit should be on the cutting table. absolutely. to the degree that the president is saying we must all enter this negotiating room with no preconditions -- no. but the president, like any other politicians, would have to explain why -- to the american people why it program that has worked for more than 75 years and never contributed to any of these deficits or the national debt should be used to pay for these massive deficits we are suffering from. host: would you consider any changes to the social security benefit program or the funding formula to help get rid of the
debt? guest: peter, it is for the purpose of strengthening social security so in a quarter-century we are told there will be an imbalance of about 20%, absolutely i would consider that. but if it was for the purpose of paying for these deficits that were caused by other things -- principally the bush tax cuts to a wealthy and unpaid for wars in iraq and afghanistan, then i would be absolutely against that. host: one more headline and then we will move on to the debt talks. "administration offers health care cuts as part of budget negotiations." this is from "the new york times" on tuesday. guest: what the president is trying to get a very recalcitrant bunch of politicians to come to the table and negotiate. he has tried many ways to get republican colleagues to come to some middle ground and has not succeeded and i suspect he is saying, look, i will put
everything on the table and let us see what sticks. i suspect that is what he is doing. otherwise we just save about half a trillion dollars in medicare the next -- years through the historic health reform. how you are going to take more out without really hurting seniors, i don't know. host: steny hoyer, your democratic whip, said he was willing to work with the republicans to reduce the debt. what did that mean to you and how willing are you? guest: i think with -- what mr. steny hoyer is saying is most democrats have put things on the table, some very painful things. and i believe that democrats once again are prepared to put some painful things on the table. the president has suggested that even social security might be on the table. i wouldn't put it there but if i want to set at the negotiating table i have to recognize that i have to keep all of my sacred
cows, all the things i want to protect, on the table, and see what stays on because ultimately the public should get to see what we put on the table and will be kept on the table. host: xavier bacerra is our guest, ranking member on the ways and means social security subcommittee and also by share of the house democratic caucus. he represents an area in southern california. 202 is the area code -- are you seeing any movement on the republican side as far as tax increases go? guest: you know, it is unfortunate but even in getting rid of tax loopholes which cause a very small fraction of americans to have lower taxes than the rest of us, we can't get that even on the table for
real discussion. i think it is crazy when executives can use corporate jets, writes off the cost of that, and most americans are lucky if they can't find a economy seat on a commercial aircraft and they don't get a deduction. it is one of those things where we should at least talk about getting rid of the tax loopholes that allow people to evade paying their fair share of taxes. host: the first caller is from minneapolis on the republican line. richard, you are on. caller: good morning. i want to remind you i am a republican and i want the democrats to defend social security because it just can't be done because a lot of people out there cannot work until they are 62 even, in these manual laborer jobs. so, i want the house democrats and the senate democrats to defend social security, and even though i am a republican, and it
seems like obama is turning into a republican -- i think he has to be voted out. thank you very much. the guest: richard, i would say you are not a republican. you are an american and a taxpaying american who wants to see a program will -- that worked so successfully work again. i have a chart i would love to show. let me take it and -- host: let me take it and put it under the camera. host: the bush era tax cuts have contributed to the lion's
share. guest: that is not my chart here that the congressional budget office. iwe use this to account for the cost of programs. and host: this is the stimulus. red is the park, fannie and freddie. and economic downturn is the light blue. these are what the cbo is saying -- this is what the cbo is saying this is what the deficit would be without these factors. guest: bottom line is if we have not done the spending that is outlined, the deficit would be the very bottom line, which is virtually nothing. but because we went into iraq afghanistan and did not pay for it, and we have also seen the economy turned down, and you
can see the effects of the park, bailout for wall street coming in the effects of the stimulus-- ofyou can see the effects bailout for wall street, and the effects of the stimulus. the big costs we still run are with the bush tax cuts, because they continue to grow for those that are very wealthy. in the chart you see social security? -- do you see social security? host: it is going down, correct? guest: it is going down, but it is still high. in the next 10 years where it is social security contributing anything to these massive
deficits? not a cent. it will continue to contribute to the surpluses, because people will continue to pay into salsa security. that is where some of the subject when someone says you have to cut social security benefits for seniors to you can cover the deficits. take good you think the 106,000 income cap should be lifted on so-so security? guest: those are the kinds of things we could have a conversation about to help social security in the long term. if you're going to raise the cap on income so that bill gates pay's not just taxes on his first 100,000 in income, but more of it the way most americans do. 94 percent of americans earned 106,000.
6% of americans to make more than $106,000 did not get all of their income tax. could we do something like that? absolutely. that could be part of the solution to help shore of social security. comes from next call pittsburgh. george. hello. caller: my points are -- i would like to make quite a few, but it will be hard. as far as social security, i have been on it for some time now the first hit is when ronald reagan started charging making it eligible for taxes 50% of your social security. then when i finally did retire in 1992, shortly after bill clinton raised it to 85%. and the fact is yes, what does
that do for me? i have paid $50,000 more in taxes because my social security was taxed. for a while my wife continued to work until she was 75 when the department store shutdown, and she was paying into social security tax while we were receiving some. as far as i am concerned, this national debt and deficit, it started when ronald reagan cut taxes from 75 to 30%. guest: art has two very important facts correct. that is that people have paid for social security. this is not a welfare program where people are getting some sort of unearned benefit. we have, as was mentioned in the
past, shored up social security and done things to collect enough to cover the cost of social security. when all is thrown into the mix to help cover something that social security did not cause, it becomes very difficult for a lot of people to understand. if i were george i would be concerned. the other part of what george mentioned is also important. if i turn turn to the chart you have in front of you there, i think it is important for us to recognize social security as not only never contributed a dime to the deficit, but social security holds more money in its reserves than it has spent. there are people who say it is fictional, no such thing as a social security surplus. the chart in front of you shows how much we put into the system in the 75 years and how much we'd taken out. >> this will be by the end of
2011. by the end of this year, 15.5 trillion dollars will have been contributed or deposited into social security. the aerial table shows that in the coming 10, 15 years, the output will be much greater than the income. the dark blue bar in the first bar, the blue portion, that is where people have contributed to social security taxes. the fica tax is the total amount. the beige bar, that is the amount that has been earned in interest on all of that money. the blue bar that has been deposited to the trust fund. about 14 trillion has been deposited by americans and a lifetime of social security through taxes. another trillion 0.5 has been deposited into the deposited --
another trillion and a half has been deposited into the trust fund. the red bar is the actual benefits that have been paid out to all americans in 75 years. the small black bart is the cost that has been administered to social security for the 75 years. total them up and you get a net surplus of over 2.5 trillion with social security. some say you cannot count interest. when you deposit money into the bank, you earn interest. same thing. payers have been deposited through treasury certificate for quite some time. even if you discount interest, social security, american workers have contributed more to social security then we have ever spent directly. our taxpayer dollars are still more than what is being used. you will begin to see the red
bar grow in size, and that is why we have a quarter of a century we will have to do something, but we're talking with dealing with deficits and debt today. social security -- we could all fall asleep for a quarter of a century and social security would continue to go forward until 2036 without running any deficits. obviously no one wants to wait until 2036 comes to deal with the shortfall, so we should deal with it today. host: what you think the politics behind president obama social security proposal or throwing it on the table, what do you think the politics are behind that? >> i think it is the president tried to figure out how you get republicans to sit at the table? we saw how the republicans walk away from the table. we started talking about all the things that really needed to be done.
i believe it is getting them back to the kitchen will be tough. every american family has to sit in the kitchen figuring out how to pay for the bills, how to figure out how you send your kids to college, so should the people who have been elected be able to sit in the hot kitchen and do their homework. this is not as difficult as people say when it comes to social security. when they talk about the shortfall, what would it take to fix that shortfall? this is a chart to give you a real quick sense of how simple it would be to fix social security -- term to make sure there's no cut in benefits. you take the bush tax cut for the top 2% side burners in america. if they had to forgo their tax benefits they got to the bush tax cuts, you could take care of
social security for ever. host: half year but sarah is our guest. american hero tweets in to you. -- javier basero is our guest. guest: that is a distortion of what we have been saying. what i am saying is we should all make sure we're paying our fair share. if you and i are paying taxes at a certain level, there are few americans that are paying at a lower level, because they're finding these tax loopholes to avoid paying the amount of taxes that the best of us are paying. if we tried to get those folks who are eating their fair share of taxes by finding all of these tax giveaways, i do not consider that a tax increase, i in -- consider that leveling the tax
rate so everyone is paying their fair share. someone has to pay for the war at some point, and should not be on the backs of working class americans. did someone is making $1 million, there is no need to give the millionaire another tax loophole to pay even less in taxes. that is why warren buffett, one of the richest men in america continues to say i pay at a lower tax rate than my secretary. host: next call comes from hamilton, montana. caller: there is so much to talk about here, and i think the biggest thing to do is forget about taking the money from the people, let's take it from the military. we have 800 bases around the world. when i was in the military are protected royal dutch shell.
i protected the people of mixed in corporation. all you do when you are in the military, you fight for corporations. when they tell you we're going to go to iraq to fight for freedom, they were telling you a big lie. we should have went to iraq and said now we got these place -- now we have this place secured. 15 trillion dollars just to set foot here. we have some real problems here, and it is because these corporations are taking us to task. >host: anything you want to respond to? guest: there are a lot of folks that are not only very concerned about our strategy in places like a rock and afghanistan but are very concerned about the fact that we are now waging war with our kids money, because when george bush took us into iraq and afghanistan, he did it
with borrowed money from china, japan, banks. we have never really paid for the cost of being in iraq and afghanistan, and now we're seeing the cost of that. i have said this directly to the administration. it is important enough for us to go to war and put the life of one of our young men and women in uniform on the line, then it should be important enough for us to pay for the cost of that with our money, adult money, not the money of our children into the future because we borrow it. i can understand the misgivings come the real concerns, apprehension, agitation, because the reality is most people feel the same way. we should be responsible enough for paying what we say is
important. whether it is a rack or afghanistan, let's pay for is we do not run into the situation where we have massive deficits to deal with. plano, texas. dan on the republican line. caller: i would suggest that we consider the fact that before we allow these corrupt politicians to go after social security or medicare that we rectify the unhealthy situation in medicaid. what i mean by that is virtually every illegal alien in the country is on medicaid and thanks to the efforts of organizations such as catholic charities, which provide three -- free paralegal service to illegal aliens to sign them up for welfare benefits this country has to offer. it seems to me that is borderline treason. be that as it may, there are
huge amounts of money to be saved if we just start with medicaid and a fraud that exists there. guest: i agree with the first part of a phone call where we should keep politicians' hands off of social security and protect medicare. i disagree with the second part in the sense that -- let me agree with in the fraud. we have to grope for any fraud. what we should not do is agitate by distorted numbers. the reality is that there is no evidence that we see massive fraud being committed within medicaid for purposes of getting undocumented immigrants onto medicaid. are there instances of it? absolutely there are, but is a widespread?
nothing we have seen and the evidence. absolutely the calller is correct, and we should do everything to make sure that folks who do not qualify for medicare or so security or medicaid can get onto the system, because it should be left -- those programs and services should be left to those who paid into them and people who are in this country. host: some ideas are floating around about private retirement accounts. what is your view on that? guest: privatizing social security is the same as ending social security. to privatize it means to pull the money out of the system. whether we go back to the charts that were discussed, whether you pull out of money from the system today, all of those people who paid into in the previous year's will no blogger be able to count on the money being there for them in the future years when they are
retired. so the difficulty with privatization is that it sucks the money out of the system so that you put the money into your own private account. the first problem, you are reading -- reneging on the commitment that we may to future generations. i will pay into the system so that when i retire you will pay into the system when i retire. the second problem with privatizing social security is beyond the cuts to benefits, what do is essentially put individuals at risk of market downturns. if you take a look at what your 41 k or ira statement, a monthly statement or quarterly statement shows you today, it is probably better than it was two or three years ago when we saw the debt of the recession -- recession.
social security during the debt of the recession paid out benefits in full and on time, and it is -- it has never failed to pay in full on time one under% benefits. and that is the rock solid commitment of social security, ins that it is the one leg of the three-legged stool. -- in that it is the one leg of the three legged stool. it is the one guy that has never failed in over 75 years. to risk it by privatizing so security and risk to the retiree, you can do it, but you then destroy what has been a very successful system.
host: do tax increases have to be on the table as far as the house democratic caucus is concerned? guest: you have to put taxes on the table. whether you define them as tax increases depends on what you're doing within the tax code. if you're trying to get the loopholes out of the system, i do not view that as a tax increase, because the vast majority, probably 90 percent of americans will not see a tax increase, because they're not taking advantage of tax loopholes. how much are we talking about? over one trillion dollars. it is not little money. if you dispose of the tax loopholes, you are bringing people up to level of up to where everyone else is when it comes to paying taxes. if you talk about other types of tax increases, that is a different matter. we could discuss that if you want to have fairness overall. this kid to a long way to solving the problem in a balanced way with spending cuts
and tax spending cuts as well. host: next call comes from a can, south carolina. hi, angela. en, southfrom aikn carolina. caller: one of the problems that i have, and i watched this diligently, is the way we start the conversation. we speak of the so-called stimulus bill. it was the economic recovery act. we were in a deep hole. we had to come out of it. this was not all about jobs. republicans do not even acknowledge the tax cut that were in the bill. they do not even acknowledge the fact that allows the stimulus money went to states that took it instead of using it for what it was designated for. governors used it to balance their budgets, but they do not
want to give obama credit for it. i agree with you about social security, it has nothing to do with the debt. there is a lot of fraud in medicare, and i will give you a quick examples and i will be through. medicare pays for shoes for persons with diabetes. we actually got a bill for a pair of shoes that we received. you could have bought the issue for about $50 at any department store. they put inserts and them and they charged the government $500 for one pair of shoes. each medicare recipient that has diabetes as eligible to receive this. the second example is i've had many stays in the hospital. doctors prescribed me -- put me on aspirin regimen. you can buy a 1 milligram
aspirin -- at any store for 100 4 $1. guest: i think angela has crystallized why it is we can still find the savings, and even valuable programs like medicare without making cuts to benefits. what we have to do, and by the way that was done in last year's historic health reform, which saved us half a trillion dollars over the next 10 years. that is what we did in the bill. we found those types of savings that she is talking about. we said provider of health-care services, you cannot do three x- rays of that patient and then expect to get paid three times by medicare for providing a service there really could have been done with one x-ray. we are moving towards that where
we tried to find fraud and eliminate it and prosecute those people who are taking advantage of the system. angela is correct, we have to continue to dig deep, because these guys always find a clever way to try to take advantage of the system. there are ways to make the cuts that we need to make in spending without killing a program the way it was proposed in the budget that passed the house. i think you can go a different way. angelo point out how you can find the savings. host: he received his undergraduate from stanford university. creasy tweets in the gop keeps adding unobtainable demands. -- gracie tweets id the gop keeps adding unobtainable demands.
guest: i hope that is not true, because if that is true, we are about to see the nation for the first time in its history default on its bills. the biggest problem with that is that defaulting on the bill does not just mean we raise our hand and say the government cannot pay. what it means is the bond market says wait a minute, you want to borrow more money to operate? interest rates will have to go up on you. if interest rates go up on the u.s. government, they are obviously going to go off on every single american who wants to purchase a home, to buy a car coming to send their kids to college. all this and the ripple effect will be that american families are feeling the consequences of of republicans not agreeing to help us deal with the debts and we end up defaulting on those bills. the other consequence of not being responsible is that we
tell our kids that we are not prepared as assaults -- adults to pay for the spending that we did today, and we're willing to go bankrupt, which will hit you tomorrow, because dealing with the debt ceiling does not affect anything about spending tomorrow. it is all about taking care of the spending that was done yesterday. once we deal with the debt ceiling limit, we will have done nothing to deal with the future. it is just taking care of all the spending. it has nothing to do with future spending. it has to do with all of the bills from yesterday. host: as a member of the commission on fiscal responsibility you voted against the final report, but what cuts did you support? guest: i was very close to supporting the proposal. what i said to mr. bowles and mr. simpson is you were anemic
and your men met -- menu of choices and how you apply them. principally the tax loopholes. they put the tax loopholes on the table, which is very brave of them, because they are sacred, but of the 1.1 trillion per year that we give out and tax loopholes, tax giveaways, they took only 100 billion of it to help cover the debts of the past. i believe that we should have put more of that, because by only putting 100 billion of that into paying for the debt of the past, they had to make very harsh cuts to medicare. even to social security into other programs to try to get rid of the deficits. i said that is not fair. i did not think it is fair. i said if you change or mix coming your prescription of the things you have on the table, i will vote for it, but they had to keep the votes they had. they did not go where i thought
it was important to go so i voted no. otherwise i thought it was great. >> lawrence, georgia. ed on the republican line. caller: you said too many things that i do not have time to answer to come up but i will take the main one. you're talking about fair share. people paying their fair share. most of the people that are paying this -- that are listening to you are paying less than 12% appear again you know a flat tax would give all of the pimps and prostitutes a little bit of money. guest: i disagree with you. i think most americans are paying their fair share. when you say the rates of 34% coming your talking only about income taxes. america pays far more than just income tax. they pay the payroll tax. they pay excise taxes.
they pay sales taxes and property taxes. by the time you added up, americans generally pay their fair share. the folks who do not believe pay their fair share are the folks that can hire very expensive attorneys and figure out how to navigate the tax code and find the gaps so that they can avoid paying what should be their legal responsibility in terms of the tax code. those are the folks that i am saying do not pay their fair share. we can have discussion and argument about what rights we should all pay at, and we have a progressive system of taxes where the wealthier you are, the higher your rates go, but bill gates pays the same amount of taxes on his first $50,000 in income as every other american does he makes $50,000. the problem is he makes a lot more than $50,000. most americans would probably enjoy being able to say they are were bill gates are when it comes to income in taxation.
host: a tweet for you -- guest: this is a big question come and that is why it is so difficult to tackle. that is a tax expenditure, because if you own a home, you do not have any mortgage to write interest of up when you pay taxes. you do not have any interest payment on your mortgage if you do not own a home. so it is something you get over someone who does not own a home. the earned income tax credit is something you get only if you are lower income worker, but your income is low enough that you get to take advantage of the earned income tax credit. that was a program that ronald reagan created. those are both considered tax loopholes. when i said to you that the tax loophole benefit adds up to 1.1 trillion dollars in a year and
give away money, i include that. i also include the deduction on state and local property-tax is that you get to deduct from your taxes when you file your statement every year. some people say that is not a loophole. you could agree. i would agree that the mortgage interest deduction has great value when it comes to getting people to buy their home. first-time home buyers, great when they know they can get the deduction. they are paying rent and not getting any kind of deduction. but we have to do is decide which are the valuable tax expenditure programs and which are not. is it good to good corporate executives a tax break when they like a corporate jet and set up commercially? we have to decide. because we have so many of these different tax loopholes, people are taking advantage of it. millions of americans take advantage of the mortgage interest deduction. very few take advantage of the corporate loophole on jets. that is why i said i can go with
your plan if you are more robust and how you deal with the tax loopholes. that is what i meant. go after those that are not for most americans. host: tulsa, oklahoma. david on the line. i agree with the lady, angela, about fraud and medicare. also, i think there can be some things done about generic drug negotiations that could lower the cost, and also, the charts that you pulled out on social security, you're absolutely right about that. it really is not adding to the deficit and doing what the republicans are saying. there is a lot of fear that they are putting out there, and it
does not add up to the fact and what you're actually showing. joseph stieglitz has a book out on the iraq war called the three trillion dollar war. there were three retired supervisors of the pentagon that have a book called the pentagon labyrinth that shows all of this waste and fraud. we are dealing with medicare, social security, and here are the other 82 percent of the budget that we should be looking at, which is the military, the 736 bases around the world. host: let's get a response. guest: the reason i use those churches too often people will
say he is just a politician mouthing off, spewing out wrong information. those are not my charts. those are the charts from either the congressional budget office or other credible sources. those are their numbers. i use those charts because graphically depicts what is going on. i think it is so important that people see what really drove us into the deficits so we can see what we should attack and try to go after these deficits. instead of making cuts to head start programs or low-income housing, we should be going after the things that really drove us into these massive deficits, so i appreciate the words with regards to the charts, and i will continue to use them, because they do not lie. the second point and needs to be made, and that is defense. i think every american
understands that we must have and to have the best equipped and best trained soldiers in the world. and we should keep it that way. we also have the best fire power, the best technology to protect our people. and we should. and we should invest in not skimp on that, but is there any reason why the pentagon spends $32,000 for a refrigerator that it puts on an aircraft? maybe it has to be specialized, but in july pointed out she could buy issue and offered an answer and pay $50 without insurance and set a $500 that the the provider was billing medicare. i bet i can find your refrigerator for a lot less than $32,000 that i can put on the same aircraft that the pentagon flies. those are the things we can do to save money. there is no reason why we should
continue to spend so much money. we can do things for the american people that saves them money and lets us continue to invest in our kids and seniors and workers. >host: by the way, david mentioned to books. joseph stieglitz book and the pentagon labyrinth. rg andn go to booktv.oo type in the name. last calller for the congressman comes from new york. richard on the independent line. caller: good morning, congressman. thank you for taking my call. two questions. number one, if we raise taxes and eliminated the polls, we would have additional revenue. what guarantee does the american public have that this additional revenue would be going toward
lowering our deficit and our debt? the second part of that is why are we demonizing the rich that look for loopholes, i is a poor owner -- homeowner have a loophole. guest: i missed the last part. and on the first question, great question. we have to make sure that whatever we do, whether it is in making cuts to spending or dealing with these tax expenditures or the tax loopholes, that it is a dedicated to the deficits. absolutely. you could do that. that can be very transparent, because you can read that into the law that requires the use for deficit spending. at the same time, with regard to the loopholes, again, richard
point out something very important, and that is what i alluded to in the previous response to these loopholes. mortgage interest deduction is not something that most americans consider a tax loophole. if you are renter in you are filing and make the same amount as richard or me and grinned, you do not get to deduct from your taxes. so you might consider that a loophole. what we have to do is decide is a good policy, worthwhile policy to have a tax reduction in our tax code to and sent people to buy a home? i think it is a good idea. i would limit it so that you cannot have second vacation homes account for the mortgage interest deduction. host: finally, a church do not like, they mislead. they show a social security surplus that is a bunch of ious.
guest: every time i hear someone say there is a bunch of ious in a vault, tell that to china. china gets the same certificate that social security does when it lends us money. the safest in the most universal security that is used around the world when you let someone use your money, a u.s. treasury certificate. anyone who says that the money that the social security fund has is not real, i say go live somewhere else. it is real money. do not tell people who paid into it that it is not. host: the congressman has been our guest. of next, we will continue our conversation with the congressman from mississippi. >> house majority leader, eric cantor, says any budget deal between the white house and congressional republicans must include reforms to the system.
the virginia republican went on to say that special interest loopholes in the tax code are never good for growth. he also added republicans are being wrongly accused of blocking an agreement. the government's borrowing authority expires august 2. an update on the program known as fast and furious from the san francisco chronicle. the head of the bureau of alcohol, tobacco, firearms, and explosives in meetings with congressional investigators over the weekend tells the investigators that some mexican drug cartel figures targeted by his agency in the drug trafficking investigation were paid in performance by the fbi and drug enforcement administration. the acting director has been under pressure to resign after the atf lost track of the guns and many were found at the scenes of crimes in mexico, as well as to that were recovered near where u.s. border patrol agent brian carey was killed last december. in two days of congressional
meetings, he said fbi and dea kept them in the dark about their relationships with the informant and that if the agents had known of the relationship some of the agency might have ended the investigation much earlier. as a result of the statements, a source close to the congressional investigation says that we now know it was not something limited to just a small group of atf agents in arizona and the investigation has clearly expanded. those are some of the latest headlines on c-span radio. >> it used to be we did not release transcripts of arguments. now we release them with than half hour. he used to be the audio recordings were released at the end of the term. now they are released at the end of every week. we're moving in a particular direction. cameras present all sorts of challenges that these other areas do not.
>> right now watch chief justice john roberts on cameras in the court room. online at >> c-span has launched a new, easy to navigate web site with the latest campaign event from the campaign trail. twitter feeds and facebook updates from candidates and political reporters and links to c-span media partners in the early primary and caucus states. visit us at c- >> 11 original c-span interviews with current and retired justices. this new edition includes an interview with the new supreme court justice, elena kagan and with the indians look at your
experience by watching multimedia clips. c-span, the supreme court, available now or ever eats books are sold. -- wherever ebooks are sold. host: we are pleased to welcome roger witiker. we're going to continue the talks on the debt limit and the issues surrounding money. i want to get your reaction when you saw "the washington post" fleets story this morning. guest: i think there are floating balloons, and i hope everything is on the table, but this is deep day really in the talks leading up to the debt ceiling zero hour, which is of
the second period and it is something -- if something is going to happen, if of barkin is going to be reached, it really needs to happen today and tomorrow and be published next week in order for the american people to hear about it, get the details come in order for the legislative draftsman to be able to put it into law so it will work. actually this could be as significant a day as the day in the 1980's when president reagan and the speaker came to an agreement on the social security. this was a republican president, and the speaker and leader of a pretty big democratic majority in the house of representatives coming together and agreeing on changes. not cuts until security, but the
changes and in the way it is calculated. basically it saves social security for three decades. a major achievement by many standards. either one of them could have walked out of that room and is engaged in some hyperbole, but they did not, and they came to an agreement that was good for current retirees, which was good for future retirees, and was good for america and good for the system. it showed that republicans and democrats can put aside their differences and come to an agreement. we are at that point today, but we do not have much time. here it is july 7, and the date we have been told that we must act is august 7. -- august 2. there is speculation that could be pushed back, but this is a
very significant pivot point in the process, so my best wishes and prayers are with the and the speaker and other congressional leaders as they talk today, because they could be about to do something very big and positive. host: you see this as a trial balloon. what did you mean by this? guest: in order to make changes in social security, the president will have to have a by and for people like your previous guest. so without announcing something from the oval office, i think what you do is you leak it to sources and let it get on the front pages of the washington post and wall street journal and
see how much of an outcry that is. i do not think either speaker bather or the president are talking about cuts in social security. nothing i have heard involves actual cuts. most of the proposals that we hear -- i did not know specifics about what was talked about over the weekend, but most of what we hear would affect people 54 years of age and younger and would involve not cuts, but differences in calculation of annual cost-of-living adjustments. maybe another gradual come a very gradual increase of the retirement age for people not about to retire, but people my children's age. that would not be in my judgment of cut, but an adjustment over time to save the program and
perhaps make it work for another three decades like ronald reagan and tip o'neill did. host: you also said everything should be on the table. does that include tax incentives in the polls? guest: i think eric cantor is a very thoughtful person, and i do not think he made that statement offhandedly. i think he knew exactly what he was saying, and i think what he was saying is we are open to tax loopholes. for example, the senate voted overwhelmingly to end the ethanol subsidies, which is a tax. host: did you vote in favor of that? guest: i did not vote in favor because it is going to end on september 31 and i thought it would be disruptive to do it immediately.
basically it will end any way. that sort of thing in return for a reduction in overall tax rates, personal and corporate, i think is something that probably the republican leadership was talking about that when eric kantor spoke out and made that statement. host: senator roger wicker became a senator after serving several years in the house. he was appointed in 2008. -- 2007 i should say. he was elected in his own right in 2008 to his first term after serving for about 12 years in the house of representatives. guest: i started in the house in 1995. host: we continue our discussion on debt talks that are occurring today. john on the democrats' line. your first up with senator wicker.
host: you know the rule. it's a turn down the volume on your tv. we will come back to you. mark is a republican. caller: good morning. senator, i have three quick points to make. the first point is i heard a statistic the other day about revenue and expenditures. in the past eight years revenue to the government has increase by 20%, but expenditures have gone up 70%. that is the problem right there. is it -- it is not a revenue issue. it is suspending issue. the second point, just up prior to you was the representative who made a comment that is very telling to me. he cited bill gates as someone who does not pay his fair share of taxes. he said the first $50,000 he
pays like everybody else, and then he said everything over that is the problem. it gives you an insight into how some of these people think. bill gates employs tens of thousands of people, which he would not employ if you made $50,000. third point, maybe it was yesterday barack obama had his tweeter town hall, and he said republicans are holding a gun to the american public. sarah palin was demonized by the media and democrats for weeks. those are my point. guest: ok. i think the way we would put the last point is this is a moment of maximum leverage for those of
us that would like a balanced budget amendments and legislation capping the amount of expenditures every year, so maybe it is better to say using leverage rather than a loaded gun, which might be a bit of hyperbole. as to the second point, i do not think you find anybody on capitol hill who lies awake at night worrying about how much tax bill gates pays. our concern is that when you start raising taxes and start trying to target the rich what you really end up doing is targeting not the mega billionaires' like bill gates, but small business people, risk takers and job creators. most of the jobs created in the united states come from small-
business, and that is the reason we fought so hard last december, and that is the reason why the huge democratic majority in the house of representatives agreed not to raise taxes on job creators. this year we will spend in the federal government, 3.7 trillion dollars and will take in only 2.2 trillion dollars. clearly i agree with you, we have a spending problem and not a revenue problem. any agreement that i would vote for needs to acknowledge that fact, and the tax spending where it actually is. >host: 4 colleague barbara boxer was on the floor of the senate talking about corporations. -- your colleague barbara boxer was on the floor of the senate
talking about co corporations. >> the tax breaks for corporate jets is $3 billion over 10 years. subsidies are the biggest cost for companies. what a am saying is we do not have to balance the budget on the backs of the senior citizens who need their medicare, on the students who need their pell grants. we do not need to do that. guest: well, the senator from california is advocating higher taxes on oil companies. of course the reason the profits are so high right now is that gas prices are high. i have advocated policies over the years, and i think republicans have advocated production and drilling policies that would have brought the price of gasoline down and brought record profit -- record
profits down. if you tax the oil companies, i think what we will get in the united states is less domestic production. i do not think even the senator from california ones that -- wants that. as jealous as some americans might be of oil companies. it seems that in the last two weeks the president and his spokesman have seized on to this issue of corporate jets. it reminds me of the tax on yachts from 1990. there was some fever of jealousy with regards to people that own yachts, so congress passed a luxury tax.
we lost between 7000 and 8000 jobs. the boat building industry and democrats could not rush back to washington fast enough to repeal this luxury tax on yachts. i think it would end up being the same thing. i know it would not be much of a revenue raiser, but it probably would succeed in throwing a lot of people in the aviation manufacturing business out of jobs. >> austin in salt lake. you were up and on with the senator. caller: thank you for taking my call. good morning, gentlemen. i am glad the social security issue is on the table. i am -- i think all welfare programs should be on the table. my question is should there be a separation of church and state?
perhaps separation of government and economics? guest: i do not know how you can separate government and economics. i think to the extent that government spends less taxes and less of a regulatory burden, we can help the economics of this country, but i do not know how you can separate it. host: i do not know if you saw david brooks column from monday, but you probably heard about this, "the mother of all no- brainers." guest: ok, i would say this. the republican response to that from people who have been in the room is that mr. brooks was mistaken and the premise. in other words, the fact that he was relying on to offer this opinion or not there, and i know
for example senator kyl, the republican whip, said actually there has been quite a bit of discussion about revenue raisers, user fees, the sale of federal property to raise money coming in so to the extent that mr. brooks has perhaps gone one side of the facts, i think it is probably a flawed opinion piece. host: next call comes from new york city. allen, a democrat. caller: thank you very much. i do not even know where to begin. number one, the whole disparity of income, it is like 100 years ago were you have a tiny number of people controlling more and more of the economy. taxes are very low. corporate taxes in this country are almost the lowest in the world.
it seems as if all your angling to do is the story obama's presidency and the rest of us along with obama. -- is the story obama presidency and the rest of us along with obama. -- destroy obama presidency and the rest of us along with obama. people making more should pay higher taxes. 30 years ago we had a booming economy. i do not understand how you can justify what you're doing to this country. i really do not. i think the american people are beginning to wake up and understand you really just represent their rich, and that is about it. guest: ok. i appreciate the point of view, which is a very important point of view. i am perfectly willing to have
an election on that basis. party wants to put forth a platform of going back to 70% and 80% tax rates for the people who are creating jobs in this country, i will be happy to have that debate, and republicans will win an overwhelming election, because american people reject that amount of confiscation. . . he said that at one -- one point, he supported raising the corporate rates and is now willing to admit that was a
mistake. what president clinton says today is that our corporate rates make us uncompetitive in a worldwide economy. be advised that there are members of your party that disagree with you on that issue, alan. and finally on the issue of trying to destroy barack obama's presidency. thisn't really think -- bargain that we are sort of hearing details on, if it comes to fruition, i think it actually will help president obama and i think his popularity will go up. of course, i will be voting for the republican nominee in november of 2012. and i hope most americans do. but be that as it may, i think the president and all of us in
washington could help ourselves politically by doing as reagan and tip o'neill did, doing the right thing to say our economy and bringing us back from the brink of financial ruin. host: the next call from senator wicker comes from dallas. carl, independent line. caller: senator wicker, i was able to watch the discussion fairly calmly until you brought up the 1983 greenspan commission as a model for what we should do now. maybe as a model of the two opposite sides talking. but as a solution, to me that was the biggest crime perpetrated on future generations for eons because it did nothing but established the fact that an unsustainable system will be even more unsustainable by establishing a fiction that we could set aside obligate's that would
my kids and grandkids to pay outrageous taxes to support my generation. it is just wrong. and the sooner we can be honest -- i understand politicians have to answer to their constituents and it is of their constituents fault as much as the politicians. it is a self-fulfilling circle. host: we will leave it there. guest: i don't believe i mentioned the greenspan commission. what i did make reference to is something i am proud of, and that is the agreement between president reagan, a republican, and speaker tip o'neill, with a huge democratic majority in the house, coming to an agreement to save social security and make a viable for some three decades or more. that is what i was speaking of and i stand by it on those remarks.
host: the next call for senator wicker comes from his state of mississippi. hattiesburg, mary on the republican line. caller: how are you all doing this morning? i am a republican and i wholeheartedly have been a republican all of my life and i am glad. and i am from mississippi, and that is kind of rare. i got to be disabled at age of 51. told me, because i am on social security disability, not my disability social security. and they told me i am supposed to be getting one money but they cut the cola, would not raise it and i am getting less money than one -- what i am getting. two years, have gotten heart surgery -- what medicaid gives me in the state of mississippi,
those senators and mississippi have cut medicaid some much that most of that, people in the state of mississippi in poverty just dealing with medicaid. host: we will leave it there and say of senator wicker have the response or solution. guest: ok, well -- with regard to your second part, medicaid is a federal and state partnership and the decisions like the one you mentioned are made at the state legislative level. so, perhaps, your state senators and representatives are listening and can be responsive to that issue. with regard to the cola, cost of living adjustment that occurs each year, it has not been received by anyone in the federal government over the past two years because the inflation rate has not been such that it has called for a cost-of-living
adjustment. host: the next call, tennessee. allen, a democrat. you are on with senator wicker. caller: senator wicker, i really appreciate you coming on. i followed your career since you were down in the weeds in the house of representatives. i respect your opinion and i want to ask you take questions. have you considered means testing for social security, medicare, medicaid? what i mean by means testing is if a person has a net worth of $5 million, just throwing the figure out there -- you can adjust where everyone to -- but a net worth of $5 million or more, then they go out and buy their own private insurance, did -- i am a democrat. i am a hard-core democrat. but this has been a republican idea for years.
go out there and allow -- and demand a means testing for social security benefits, for medicare, for medicaid. if they have a net worth over $5 million, then let them pay for their own means. you heard the story a thousand times, getting the check and putting it in the bank and bill clinton and all of these people 62 or 65, whatever they are. and the other question is, so ?hat if we default on the debt the people we will hurt -- it will hurt the most will be wall street. people with 401k's, and i know a lot of people who do that, but what is the end result if we do default? i will hang up and listen because i want to know your sink
opinion. guest: we are kind of running out of time so i will try to be more succinct. means testings in situations that you mentioned is something we ought to look at. if someone is earning over $1 million a year in retirement, i think most americans are comfortable with the idea that maybe they shouldn't receive quite the same benefits and entitlement programs as the average american. now, i don't think there is going to be a default. we may get to august 2 and go past that deadline. we may go to labor day. but according to current law, there is no way we are not going to pay the interest on our treasury bills and on our bonds. that is the last thing we would do.
we certainly would have enough money to pay social security and medicare. where it would hurt the average person is, the last time this happened -- and it did happen in the 1970's -- interest rates shot up. that hurts everybody. that hurts at peak -- people trying to buy cars, it hurts homeowners, young people trying to get a house for the first time. it would kill our housing market and be disruptive throughout the economy. and when the economy is disrupted, it is bad for everybody -- the people at the higher end of the spectrum can probably get by easier. but it is a disruption we don't need and it can be avoided if we would sit down as good citizens and americans. and it a bargain we are reading about in the paper and come to fruition over the weekend. host: senator, you said we will probably go past august 2, all
the way to labor day. what did you mean? guest: it may happen. we are hearing now that the treasury may move that date. it has been moved once already. we are supposed to have already gotten to that point. but the secretary of the treasury moved to august 2. it could be that he could recalculates and it could be the third week of august. but even if we go past an artificial date, we are going to take our obligations. the united states is not going to default on its debt. and we certainly don't have to default on people who are due their medicare benefits and their social security payments. this is not something i look forward to. but it would not be the cataclysms that some people fear. host: what do you think about the proposals of using -- that
president obama could use the 14th amendment to go ahead and increase the debt ceiling? guest: i really think that is very dangerous top. the congress is given the authority to borrow money. that is clearly in the constitution adopted in 1787, and we have been operating under that the whole time. the 14th amendment mentioned something about the president's dealing with -- the president dealing with the national debt according to law, the law set by the united states congress signed into law by the president. it is very dangerous ground for him to be talking about that. instead of spending any energy on that issue, the president and the leaders of congress need to
be in the white house hammering out a deal. host: the next call for senator wicker who got his undergraduate and his law degree from university of mississippi. john, independent line. you are on the air. caller: go ahead of -- thank you for taking my call. i just wanted to ask, using this, i guess, for my unique situation. i retired from the military in 1991. guest: appreciate your service. caller: i get a pension. of course, it is not that much. i became totally disabled in 2005 and i didn't start drawing social security disability until 2009. two questions -- why are they even considering putting social security on the table in the first place if it never contributed to the debt, because it is funded by all of us who have worked, and someone we
furred to it as a welfare entitlement -- someone referred to it as welfare, but it is not at all. it is earned. number two -- what kind of effect would it have on someone like me who depends on that -- the disability? i never had a chance to have money saved during my career because i was a single parent, i had two children, and i had to spend everything, even after i retired, and i had to go to work. work and i amt just wondering how it will affect someone like me. i am not really considered a senior, 59 -- host: john, we got the point. guest: john, i appreciate your service.
i myself am a veteran and i appreciate the people who sacrificed to the extent that they are disabled under the system. i wouldn't change your benefits at all. i don't think anybody will propose to do that. there are some fear mongers out there who might try to suggest that for political purposes. i don't think you need to worry about your benefits. but as for the larger question of why do we talk about social security at all, we talk about social security because it is one of the three big entitlement programs that make up two-thirds of the spending. that is social security, medicare, and medicaid. and if you are going to talk about a budget deal that tackles this $1.50 trillion deficit that we are having annually, and $14
trillion-plus national debt, decant talk about it without talking about the places where two-thirds of the spending is occurring. that said, the ryan budget it did not touch social security at all. it may be the president and republican leaders today will come to some agreement to change the calculations but not to cut social security. the changes in the ryan budget in regards to the entitlement programs, only with medicare and they dealt with people 54 years of age and younger and not anyone within 10 years of retirement. host: senator roger wicker, republican of mississippi. we appreciate you being on "washington journal." about 45 minutes left in the show. we will turn to another issue that the senate is confronting, the trade adjustment act and
trade treaties. we will be right back after this news update. >> quarter past the hour. the ceo and chairman of berkshire hathaway, warren buffett, is weighing in on the debt debate. in remarks earlier on cnbc, he says congress is playing with fire by considering not raising the u.s. debt ceiling and that there is no way to tell what might happen if the debt limit is not increased. he compared the debate over raising the debt limit to a game of russian roulette, calling it dangerous. meanwhile, jobless numbers in this hour so the number of people applying for unemployment benefits fell last week to the lowest level in seven weeks, although applications remain elevated. the labor department said applications for benefits dropped by 14,000 but have been above of 400,000 for 13 weeks, and that is evidence the job market has weakened since the beginning of the year. major retailers also reporting june figures, showing robust sales due to steep discounts on summer merchandise. big merchant target, costco, and
limited posted sales numbers that beat wall street estimates. wall street reacted to the reports ahead of the opening bell -- dow jones futures are up about 75 points. those are the latest headlines on c-span radio. >> blackberry users, you can access our programming any time with the c-span radio app -- public affairs, nonfiction books and american history all commercial freight. you can also listen to our signature interview programs each week. it is all available around the clock or every you are. download it from duty-free from blackberry app world. >> now available, c-span that a congressional directories -- a complete guide to the one i didn't 12 congress. new and returning house and senate members including twitter addresses, district maps and committee assignments and information on the white house, supreme court justices and governors. order online at
>> the c-span networks, we provide coverage of politics, public affairs, nonfiction books, and american history. it is all available to you on television, radio, on line, and social media sites. find our content any time through c-span's video library. and we take it on the road with our digital bus local content vehicles, bringing resources to your community. washington your way. now available and more than 100 million homes. created by cable, provided as a public service. >> "washington journal" continues. host: now we want to introduce you with -- to howard rosen what appears an institute for international economics. he is a resident and visiting fellow. but former minority staff director for the joint economic committee for several years. we invited him on "washington journal" this morning to talk about the trade deals currently under debate in congress, but
more importantly, the trade adjustment act and what that is and why we are hearing some much about it. howard rosen, what is the trade adjustment act question of guest: it has been around for almost 50 years. what is interesting is when the united states was hardly a trader in the world, president kennedy thought of we were going to move forward with trade legislation we will have to help people who will be adversely affected. it was set up in 1962. it provides additional assistance beyond the normal 26 weeks of unemployment insurance to workers who can be identified as being -- having lost their jobs due to import competition or shifting production overseas. currently the program has about 250,000 people going through the program and it is at a cost of a little bit less than a billion dollars currently. workers who are eligible for the program can get currently up to an additional maximum of 150
weeks of unemployment insurance. host: as opposed to people -- guest: getting 26. 26 admin normal period. but you can only get the additional unemployment insurance if you are enrolled in a training program. it is a very tight condition. and as soon as your training program and, your income support and -- ends, your income support and is. there is a tax credit so they can maintain health insurance. there is a little bit of money for relocation if they decide to go to another place. then there is a program called wage insurance, which i hope we can discuss in a little more detail. and this current environment we know workers will probably take a pay cut, so under wage insurance the government will help close that gap to the old and new wage.
host: you say it has been in effect for about 50 years. the know what it has cost in the past 50 years and how many people -- do you know what it cost in the past 50 years and how many bebop gone through what? guest: the total number is probably a couple of million. i don't know the exact figures since 1963. what is interesting, there is a big human cry on the cost of this program. back in 1980 -- i know that is a long time ago -- but back in 1980 the cost had grown to about $4.50 billion in current terms and half a million people were going through the program. that was a different time in this economy. that is when the steel, textiles, and auto industries were hit very hard. there have been a lot of reforms since then -- 1981, 2002, and again in 2009, that has really tightened the program. we are down to about 200,000 people, through the program right now at a cost of about a
billion dollars. the program really has been reduced over time and has been really tightened to make sure that the program results and real adjustment and not just some compensation to workers who are losing their jobs. >host: according to the labor department, the eligibility requirements to get the trade adjustment act -- all requirements must be met. hours and wages reduced to 80% or less of weekly average. workers have been totally or partially laid off. sales or production have declined and increase imports have contributed importantly to worker layoffs. guest: what the language means -- and this has been debated over the last 50 years. the language means the increase in import competition or the shift in production has to be one of the most important reasons for the job dislocation, the job loss, but not the most important reason.
so, that it what -- is what it means. there are many factors why people lose their jobs, and it is impossible to identify any single factor for other reasons. what this language says is that there are multiple reasons and that the increase in imports and shift some production must be one of the most important factors. host: one of the benefits according to the labor department, training up to 104 weeks, income support up to 52 weeks, john search allowance and relocation allowance. -- job search alliance. guest: it is really a technical. this is one of the challenges of the program. i call it administrative intensive. when there is a layoff, the workers have to petition the government for eligibility to the program, and then there is a
little investigation. there's a lot of stuff that has to happen before people become eligible. just on your numbers alone, the 52 weeks -- don't want to get into all of the details unless your callers want to know. traditionally under certain circumstances, everyone in the country who are eligible can get 26 weeks of unemployment insurance. then under the current system -- not talking about the reforms, workers can get 26 weeks if they need remedial training in order to enter into training and then the 52 weeks that you suggested. and then actually another 52 weeks. it takes you up to 156 weeks. as i mentioned before, in order to get this money -- and the money is set at your unemployment insurance rate, you have to be enrolled in trading detraining on a day-to-day basis. if you leave the training or it is completed, the money stops immediately. because we are in a very
difficult and technical time right now, people and high unemployment states are currently getting up to 99 weeks of unemployment insurance. that was part of the tax bill of last year that will go into this year. there has been some confusion. all of that unemployment insurance, out of the maximum 156. you can get 99 plus 156. host: what percentage of unemployed are currently part of the taa, trade adjustment act, rather than simply unemployment? guest: that is a great question. there is this misunderstanding. we have these programs and new thing millions of people are enrolled. first, let me say that only about one-third of the unemployed people are eligible for unemployment insurance. i see your eyes open up like everyone does. we don't have a universal program.
people have to be made eligible. so only one-third of the unemployed. we have about 15 million unemployed. if you look at the numbers, about 5 million getting unemployment insurance right now. these are rough numbers. out of those 5 million, only about 200,000, a really small minority, are eligible for this program, which provided the intensive training, long-term training, and income support. let me mention, though, we have -- i was just listening, the president had this twitter conference yesterday. again, talking about training the workforce. every corporate -- corporate ceo talked-about training the workforce but our training programs are very weak in this country. the only worker assistance program that actually provides training for every participant is the trade adjustment assistance program. if you take all of the spending,
u.s. government spending on training and employment, take it from the budget, which is about $7 billion -- it sounds like a large number. but we have a workforce of 130 million people. it comes to about $52 per person per year. that means on average, workers can get access to about $1 worth of training every week. we are really the lowest and all of the industrialized countries on how we provide to our workers in terms of training. host: we will begin taking your calls. the lines have been up on the screen, but we have a fourth line set aside for howard rosen of the peterson institute, for people who are recipients of taa -- very quickly, here is a snapshot of the recipients. in 2009 the program was expanded to include service workers.
originally, only manufacturing workers. two-thirds of recipients are over the age of 40 and three- quarters hold at most a high- school diploma. and taa-eligible workers mean annual wages, about $34,000. two-thirds of participants find jobs within three months and enrollees can deduct 80% of their health-care costs. >> what is interesting and the numbers you just put out. let's take education. three-quarters of recipients have at most a high-school education. while people and the general population of the unemployed people, about 50% have education beyond high school. so, these workers tend to be those who have a harder time finding new jobs. they are older, as you suggested, they have less education, and, ironically, they start with a higher wage and cents wages have been falling for 25 years, the probability they will take a job with cuts
in wages are higher than it someone else. they do have a harder time finding a new job and that is why there is a special program targeted for them. host: is this a program that needs to be extended, or is this a permanent program? guest: a very good question. all government programs all have to be legislatively authorized periodically. this program traditionally has had a five-year time horizon. it's authorization expired december 31 of 2010, but there were reforms in 2009. so we have a regular program, the operation expired but the 2009 reforms actually disappeared. this was extended until february 12. but they actually disappeared. congress is now considering two things -- continuing the program and what to do about the 2009 reforms. a deal has been negotiated between the senate democrats and
the house republicans because they are the leadership of the finance and relevant committees. so, that deal is now being currently debated. but let me say to your question about does this program need to be renewed in a more big picture answer. that is, the united states is heavily engrossed in the global economy right now and if we continue to want to expand that -- and we know from public opinion of pole -- polls, a vast amount of americans are willing to support our engagement in globalization if we are willing to help people who are adversely affected. host: howard rosen firm is what the peterson institute for international economics. talking about the trade adjustment act. we will begin with a recipient in fort smith, arkansas. guest: hi, how word. i am fine. i would like to say i worked for a company and of the income of utah, back in the 1990's. the ceo on television set all
our jobs are safe and secure and three months later we found out he was shipping all of the jobs to malaysia. i feel it is ceo's will be like that and politicians will sign trade agreements to send jobs overseas, the lease they can do is retrain us. i went to utah state university and got a trade and ornamental horticulture and now i own my own nursery and landscaping business. host: when you went to school, was that part of a government benefit? caller: it was the taa program, exactly. guest: first of all, i am really glad to hear that what started out as a bad situation turned out to a good one. i would argue it was a small investment on the part of the u.s. government. we need to hear more of these kinds of stories because you guys are the ones on the front line of this battle and we never hear very much from you here in washington.
that the program was affected in your case is gratifying. i would only suggest we need to hear from more of your colleagues. if you are following the debate in washington -- people just think this is another throw out to workers, and those unemployed workers sit at home and watch tv until they decide they need to find a new job. at i think our policy makers need to know what the real experience is of people will lose their jobs. thank you for calling in. i know it is very early out there. host: west virginia. danny, democrats' line. caller: i find it interesting that the government has to have this program. they basically know that whenever they put through these free-trade deals, americans will lose their jobs. this is trying to say, well, we will help you out. in general, people get retraining and find there are no jobs available even after they
are retrained. i am so against a free trade. when this gentleman said the public is in favor of globalization, in fact, 70% of the public is against free trade deals and the peterson is that it is a propaganda institution to be -- organization in favor of treatment -- free trade. if we keep on this track we are headed for disaster. host: i just want to add we got a tweet from scott king -- guest: the peterson institute is a private research institution and everyone has different views. i would acknowledge -- the beauty is in the eyes of the beholder -- my colleagues of the institute have done work that shows the gains of international trade and investment to the u.s. economy can be as much as $1 trillion a year, about 10% or a little bit less of our current
gdp. so, the benefits of trade are large and widely distributed. everyone in this room, everyone who is listening right now, even those against globalization can go to the store and benefit from it because of access to better and cheaper products. in fact, this day and age i would argue it is going to be almost impossible to close ourselves up from globalization. i believe that the only alternative, since of the gains are large and widely distributed but the costs are heavily concentrated, and certain people like the previous caller pay a heavy price -- which is they lose their job -- then the government has an obligation if they want to pursue these policies, to at least help those workers who are adversely affected. that is my position. host: jeff tweets in -- true? guest: angela, it is true and i
happen to know first hand because i was working on capitol hill and wrote it into the legislation. the critics of the program at that time actually took out their requirements, but the department of labour agreed to the study. but as the person who tweeted in has said, it is overdue and the government has spent 8 million or $9 million and i would argue strongly in -- this is not just a compensation or a throw out for workers. and if we want to make the programs effective, we have to know how they work. i would argue we really need these studies on an ongoing basis. not that the answer is someone can say it is ineffective, throw it out. the question is how it is an effective point -- how is it an effective and how we can make it better? but as you suggested before, we do have some evidence that helps us in the interim until we get the full blown studies.
one, saying two-thirds of the workers to find jobs within the first three months after they leave the program, and 90% a year later still have those jobs. at least there is some evidence. and for individual workers -- i have yet to hear any partisan and saying this was a complete waste of government spending. but we need to have evaluations. i think it is irresponsible to run government programs without doing so and i was active the one who but the requirement in so i have a real interest seeing the results of the study. host: mary from frederick, maryland. -- murray. caller: the quick question. it seems in the global economy that everybody loses their job has a certain point their job has been outsourced. i would like to know the specific criteria that is -- that not been -- that must be met. guest: the essential criteria are there is a job loss and we
have to be able to show the job loss is associated with either an increase in imports or u.s. company closes down to the united states and shift production overseas. but what is really important and may be getting to where your question is coming from, is initially the program is only -- was only for the front line worker. let's say someone working for a car factory. the person making the job lost their jobs, we are importing from japan. we found that was the case so we would assist that worker. over time, the eligibility criteria has been expanded so we could also include those workers up and down the supply chain. because we were missing the great majority of workers who were adversely affected. and a card case, the guy making the tires or windshields were not covered because they were not working in that auto place -- in the car case, the diamond and the tires or when shows were not covered.
and third, the service workers. what we are seeing is a lot of companies now outsource a lot of their services. for example, their accounting services or maintenance or the cafeteria. 20 or 30 years ago when an auto plant closed, everybody lost their jobs. the accounting company doing services for that. that is why we expanded eligibility to include service workers. that is the rationale for opening it up further to try to get not just the people on the front line be affected by globalization but also those people along the lines. host: there are proposed changes to this program that senator baucus and the representative, pick the finance and ways and means committee chair making, including capping the unemployment to one under the 36 weeks and reducing health-care costs the deduction to 72.5%
until the end of 2013. why other changes being considered? guest: in 2009, there were some expansion of the program. one of those was to expand, as i explained, to service workers. the other was to increase the tax credit given to workers so that they can maintain their health insurance. it was a 65%. in 2009, it went up to 80%. those are the two major changes in 2009 but there were technical changes. there was concern over expanding to service workers. comprising 80% of the workers in this country. so, that could lead to a radical expansion of this program. what appears to have happened in the negotiations is the party is traded off the eligibility criteria so that they maintain covering service workers, but instead, cut back the assistance to everyone in the program.
instead it, getting a maximum of 156 weeks, they could get a maximum of 130 weeks. that was, i think, traded off to continue to keep service workers in the program. as i mentioned before, the program is now estimated at about $1 billion and just reducing those six months -- taking the six months off of assistance could save something like 300 million or $400 million, almost half the cost of the program. the other is the health coverage tax credit. it was 65, it went up to 80. if you do the math. all they did was split the difference. that is how they got 72.5. host: just be clear, we got this tweet -- just to be clear when you wrote the legislation. guest: i was working for a committee, as you mentioned -- i was working for a congressional
committee staffing several members of congress and it was my job to write legislation. i did say that what happened at that time -- some of the listeners may remember -- levi strauss laying off one-third of its workers and we found the existing did not help the workers. we went back to scratch -- what we did is we sat down, a group of us, talking to workers going through the program and look for the research and try it to think what was the best thing to work. not just what would fly to congress but the best thing to work. i should say that whenever you do reforms, you need to have checks and balances and that is why we put in requirement for data and evaluations. host: howard rosen is now with the peterson institute.
caller: the purpose for free trade was that american public made in america could be sold in china or were never placed, as well as -- or what ever place or import products to bring this abate in the world economy. instead of that happening, the american companies decided, all paying, rather than produce the product here in the united states under the free-trade banner, i could now take those jobs -- it was built over the years by american labor. all those jobs and take it over to china. and then they produced the product in china at a lower price. they bring it back to america. americans have to buy the product. if that is why the rich is getting richer and the poor are getting poorer.
guest: you are correct there has been an imbalance over the years in our actual trade. which means that we are importing more than we are exporting. that is correct. that is not because of things like trade adjustment assistance, but in fact the trade adjustment assistance program is created to respond to that imbalance. that is a problem. but that raises a whole bunch of other questions, which is why are u.s. companies moving aren't -- overseas, why do we and importing things that we used to burn this year. i would ask the host to bring on another day to talk about that. we are a very productive economy, which means we need less workers to produce things. what happens is the profits realized because of the increase productivity has not been reinvested here in the united states. what happens is the companies are profitable in part because of what they sell and do here in
the united states and sell abroad, but we need these companies to reinvest here in the united states and ordered to expand employment and production, and i would argue, in new areas. the united states should not be producing oil and textiles. what is missing is we are not moving up the ladder. this is a discussion of trade adjustment assistance but there are a whole other set of policies we should be considering to improve the competitiveness of u.s. companies. host: the next call comes from trade adjustment act recipient in nationalnashville -- nashville, tennessee. caller: i was a recipient in 2001 when i lost my job because it went to china. if it were favorably for about three years, at which point i lost the job i was trained for
plant and put not find a job in the field -- radiology technology. now i am making $8 an hour. host: a couple of questions -- what was your job in radiology technology that got moved to china? caller: the job that that moved to china, i was at a plant. i apology -- host: what were you manufacturing? host: lawn mowers. host: ok. guest: you lost your job and lawn mowers and train for radiation technology and you work in that field for a couple of years? caller: 3 1/2 years, a wrongful discharge. host: did taa pay for your training? caller: they paid for my training, which was excellent and i got a job. i worked for three years and then was wrongfully discharged.
so, i found another job -- there is none other job in that field. even though i have the training, a social degree in applied science but could not find a job in that field. guest: what is interesting in that field, and is the question. 10 years ago we thought the radiation technology is a job only what that would have to be here in the united states but those kind of jobs are also moving overseers. i have a friend of my own who live overseas and. x rays that are done in the united states during the night while we are sleeping and send the results back. even service jobs are now on the front line -- host: when were service jobs added? guest: in 2009. the program, like most government programs, are always in a period of catch up. and when it started in 1963 until 2002, it was only for
manufacturing workers. in 2002, getting the supply chain workers up and down the supply chain, secondary workers. in 2009, expanded to include the service workers. it is hard to realize globalization is affecting employment across the board. if we want to pursue the policies, it seems to me that the american people are saying we need to do something to help the workers. host: does she have any further recourse question of she did work in the field, she worked for three years. something happened. can she go back into training at all? p guest: one of the tightenings that was got -- done. back in the 1990's people were rotating through the program -- auto companies and steel firms -- they were closing down temporarily because of imports, laying off for six months and rehiring them back. at that time, and the 1980's -- 1970's, actually -- taa was a
revolving door and that is where the reputation that it was a payoff to the unions came from. it actually was. i have to say my career has paralleled the program. i was working at the labor department at that time and saw the abuses. that is how i got interested in this program to see if we could do it right. so, no, you can no longer revolves through the program. you get your assistance once. and as the caller suggested, percent that layoff was not due to globalization so she can go back. that is the way it is. host: howard rosen received his b.a. and master's degree -- a former minority staff director for the congressional joint economic committee. he is a current visiting fellow with the peterson institute but also executive director of the trade adjustment assistance coalition, which is what? guest: in 2002, after i left congress -- i left working for
members of congress -- what i learned it was having legislation is very nice if you have been on the books but you have to implement the legislation and get it in practice. what i also learned is there was really -- it what i heard -- learned a little bit from the callers -- no one really advocating for the workers trying to navigate through the bureaucratic program. the department of labor administers the program, so by law they cannot advocate on behalf of the workers. what i found is the business community is very interested -- as one of the callers suggested -- they are interested in the free-trade agreement. they're willing to help workers but that is not the primary concern. their primary concern is to expand trade and the economy. and the union, which you would believe to be the traditional route that would advocate on behalf of the program, they are nervous and anxious because they would rather see us slowdown our trade policy and the liberalization. that is their response. so there is really no one in the middle trying to say trade is
good for the economy, it has costs, which should help the workers, and we should also try to help the people as they tried to navigate through the program and that is why we set up the non-profit. i would say to anyone listening is if you are having problems navigating, you can get in touch with the coalition, we have a web site, we help workers, we can find them assistance if you have problems with your petitions and investigations. a viewer tweets in -- is that true? guest: yes, it could be. i travel all around the world for my work and ask people about the type of jobs they do. you would be surprised at what kinds of things -- of course, credit card, when we buy things, and all of that, accounting is overseas.
but actually sometimes our medical vouchers we are putting in for repayment to insurance company, and also, people who are doing emergency work. different time zones. we can see this as a negative because it might hurt our workers but we also see as a positive because the world is now working 24-7 and not just waking hours. this is something may be done during times we are asleep and may be helping us. but that doesn't mean it doesn't have a small cost to us. that is again why we are going we should help those people. host: west palm beach, florida. caller: i am calling for mr. rosen. i think international and poor is especially to every american in the united states. just recently, mr. wu, the prime minister of china, went to visit the white house and he was more
or less very dictatorial about changing the reserve currency which is now the u.s. dollar, to that of the bancor. if this happens, this would throw america immediately and what i would call hyperinflation and economic freefall. am i not correct in this assumption? guest: thank you for that question. for many reasons. one reason i thank you for at this question is what it shows as we can no longer just talk about one piece of globalization. we can't just talk about -- well, imports are hurting jobs, or something like that. it is a very complex set of issues and we have to engage. one of the issues is the exchange rate. what is happening now is the chinese have been artificially manipulating their currency, keeping it low relative to the dollar. therefore good coming in from china are cheaper. and our good going into china
are more expensive. this has been contributing to the imbalance i mentioned before to another caller, that imports are growing faster than exports and this has an effect not only on employment and jobs but also on the current account. and everything has to balance at the end of the day. what happens is we end up, the united states economy has to borrow from overseas in order to close that gap between our obligations to foreigners and foreign obligations to us. that is why we have been borrowing a lot of chinese y uan. we are big holders of that currency right now and the chinese are quite concerned about the fact that everybody gets paid back that all of the yuan we have been borrowing. that is what leads them to say that maybe the dollar should not be being dominant currency anymore because we have the imbalances and we are very concerned because we are over exposed to the u.s. economy and
that is why those ideas of may be thinking about different currency arrangements become bloated. it here -- to say but this is a much more complicated issue -- two things -- one, all of these issues are interrelated. we can't just pull out one piece and say we have to stop buying imports from korea and that is the end of the story did much more complicated. second, we have to be concerned in the long term, the united states, of what are the implications of some of our economic policies right now in terms of our role in that world economy. and just to bring a full circle, the debt discussions we are having right now are really not about you and me, because that is hardly going to affect us. but it is going to affect our standing in the world economy and investors investing in the united dates and the value of our currency. the decision of august 2 is
enormously important to us. not just a political football. all of it fits together. host: howard rosen, currently the senate finance committee is meeting on three trade deals -- colombia, south korea, and panama. the issue of tying the trade adjustment act to those trade deals, is that normal procedure? guest: ok, you've got very good questions. first of all, the senate finance committee is just today considering those. it has taken quite awhile for the agreements to be negotiated -- by two administrations, the bush and the obama administration. at the same time we had the situation with trade adjustment assistance expiry. the obama administration said they would like to link the two. as i was arguing the last 20 or 30 minutes is there is a connection between trade and those people paying the cost for that trade.
the language that is used in that legislation has to be necessary and appropriate. that is the question congress is going to be considering now. is helping workers adversely affected by trade necessarily appropriate for an agreement that liberalizes trade which means we might be importing more. i would argue i think it does. there is a precedent, actually. back in 1993 when congress was considering nafta, the agreement between the united states, canada, and mexico, there were amendments to the treaty. if you might remember at that time, president clinton one side letters on labor and environmental issues, and also there were some reforms for trade adjustment assistance. there is a precedent in 1993. senator baucus is using that to bring up the trade adjustment assistance reforms as part of these free trade agreements. but let me just add -- because there have been an -- is a lack of debate in washington. what is getting no attention is
the administration has also asked to link to the colombia agreement, the renewal of a preference program for imports from developing countries, which is called the generalized system of preferences. this program also expires back in december, extended for a couple weeks until february, and it affects our ability to import products from developing countries. those people who we really want to help. everyone has been focusing on trade adjustment assistance but no one is paying attention to the fact that the gsp program is expired and been linked to the colombia agreement. it is all very complicated but we as the united states are thinking about how we help developing countries because they bay -- buy our products and they have to sell their products but at the same time we have to have our workers who are adversely affected. it did it is part of democracy and what they're doing is linking the trade adjustment to the korean deal and gsp to the
colombia deal. host: you are on the line with howard rosen. a minute and a half left. caller: something we don't hear anything about -- i have been in construction. illegals have taken my job. it has not been exported. we have had a flood of illegal coming in and our government does nothing. get them off of it. guest: well, you raise a very interesting point. there was some consideration -- i note for the critics of the program, and -- some concern. there was consideration to consider immigration as criteria because it is also part of globalization. there i would say that that is another set of policies from emigration policies, state enforcement, federal enforcement. but again, and raises the issue that this is all very complicated. the united states is fully engaged in globalization because of people, goods, and services, and we have to have the kind of
policies in place to help us respond to those pressures at all levels. host: the senate finance committee, the hearing we talked about, is currently meeting up in the senate. and you can watch that on c-span 3 if you are interested in following the free trade agreement. caller: -- guest: it is guaranteed to be lively. host: shreveport, louisiana. a very short time. caller: no matter how you cut it, this assembly began as strictly a union saving jobs -- this essentially began as strictly a union saving job and it gave union leaders time to placate their members when they all start losing their jobs. you might as well call it what it is. do you know -- host: we have to leave it there and get an answer. guest: i am an economist and i like to base my comments on facts and data. in fact, up it is a minority of workers currently